Cotton surges over 2pc on trade deal hopes, strong US data

Cotton futures jumped more than 2% on Friday, lifted by upbeat comments from US President Donald Trump on trade talks with China, while robust monthly jobs report out of the United States provided further support to the market.

Cotton March futures rose 1.61 cents, or 2.5% - on track for their biggest daily percentage gain in nearly two months - to 66.12 cents per lb by 1:40 p.m. ET (1840 GMT).

Traded within a range of 64.51 and 66.32 cents a lb.

Set for a 1% rise in the week, the second straight weekly gain.

"It seems to be general optimism that 'phase 1' of the US-China talks may go through and that's what people are talking about," said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton.

Financial markets around the world rose after Trump said trade discussions with China were "moving right along."

Lifting the mood, China said it will waive import tariffs for some soybeans and pork shipments from the United States.

"The US-China trade issue is supporting the market, as a delay keeps bears at bay for fear of suddenly getting surprised by a deal," said Peter Egli, director of risk management at British merchant Plexus Cotton.

Also, "the strong jobs report raises hopes for a good holiday shopping season," he added.

US job growth increased by the most in 10 months in November, confirming that the economy remained on a moderate expansion path despite a prolonged manufacturing slump.

Investors focus now shifts to the US Department of Agriculture's monthly World Agriculture Supply and Demand Estimates report that is scheduled for release on Dec. 10. Total futures market volume rose by 3,756 to 25,373 lots. Data showed total open interest gained 349 to 197,361 contracts in the previous session.

Certificated cotton stocks deliverable as of Dec. 05 totaled 57,469 480-lb bales, down from 83,666 in the previous session.